market is underestimating fmg, page-36

FMG management will have something to say about their predicament tomorrow.
What they won't talk about is what will happen if we get a sustained
Iron Ore price of $50/dmt or less.

As part the normal yearly cycle the Iron Ore spot price usually gets a boost this time of year.
Due to restocking before the Chinese New Year, winter mine closures and the cyclone season hitting the Pilbara.

-18c in Northern China during the day, today!

Last year we were coming off a big high already when January came around
and their winter was fairly mild. We also had the start of the great big supply glut.

This year its cold and many mines are closed down because of it.

What happens when they restart in February?

IMO we are in for another Iron Ore price shock!

If all that FMG has going for it is that it may be able to meet its debt obligations in the next few years then IMO MR Market is going to smash it to pieces!

They need to also be making money!
According to the article their break even costs are $71/dmt
Nev Power stated the same figure in an ABC interview a few months back.

How much money will they lose between now and 2017 when they have to start servicing their debt?



Australian Dollar up today and Iron Ore down again!

I'm a daytrader so I wouldn't even take my own advice on going long or long term short.
But can anyone seriously make a case for buying this stock, it seems to me that anything other than grabbing a few pips off a bounce during the day is the only reasonable play to be had here.
Anything else is gambling and very risky gambling at that!


Miners struggling a bit in New York ATM:
RIO: .27% VALE -.81% CLF .15% BHP .28%

The nights not over yet.


Good luck tomorrow to all the gamblers.